Sunday, October 25, 2015

One of the first things on newly elected Prime Minister Trudeau's agenda is the U.N. Paris summit on climate change. And why not take an opportunity for a first class all expenses paid trip to France's historic capital while simultaneously flexing your environmental bonfides? The first rule of being a member of Canada's elite political class is 'get while the getting is good'. In an example of unparalleled magnanimity the Prime Minister-elect has also offered to bring along his erstwhile menshevick allies including American born Green Party leader Elizabeth May. And why not? It's all on the public dime, so sky is the limit.

The media has been reluctant to point out the brazen hypocrisy of the massive carbon footprint associated with this epic summit but it is par for the course for celebrities and politicians who live in massive mansions and spend their time jet setting around the world to decry the fuel consumption of the little people. Couldn't this have all been done over the phone? Assuming of course that 'this' needs to be done at all, which is a very tenuous proposition indeed. This blog will not go as far as some and flatly deny the existence of anthropological climate change. Man does on a constant basis alter the environment to suit his needs. This is not only a simple fact of life it is also critical to the amelioration of scarcity and sustaining or increasing an ever larger human population. Surely if murder is evil, then allowing for the flourishing of human life must be good. And if we are opposed to human suffering than we must be in favour of activities which help to eliminate poverty. We will, however, dispute some of the claims advanced by global warming alarmists. Their doomsday models have been disproved by more accurate temperature measurements. There has been some modest warming as a result of human activities. But these activities, the development of industry and the consumption of fossil fuels, have also resulted in profound increases in the standards of living for billions of people. As with anything in life we must carefully weigh risk vs reward in order to come to a conclusion about the merits or demerits of a particular activity or policy and industrialization on net is clearly on the side of the angels.

The philosophy of etatism has done quite a lot to aggravate the situation. The economic system of free market capitalism is endlessly innovative. Firms are always forced to come up with new products or improvements to old products in order to keep up with the competition. Unfortunately government intervention can greatly retard this process. Corporate income taxes, for example, freeze investment in a particular firm instead of allowing it to move dynamically to other opportunities. Mercantilist grants of monopoly privilege enable established business interests to profit without innovation. Regulations, by defining good X in a certain manner, legally prevent improvements to it. Further the siphoning off of wealth from the private sector slows economic growth and with it technological development. The irony is that all of these policies prevent the development of new technology that would eventually replace fossil fuels. It is important to understand that oil, until recently, was simply gunk in a farmers field that interfered with the growing of crops. The miracle that is capitalism enabled us to harness this energy source, and left alone over time the market will find even better ways to power the global economy. Taxing carbon or instituting a 'cap n' trade' scheme will simply serve to further benefit the state and those who are politically connected while putting additional strain on our already heavily taxed and over regulated private sector.

Friday, October 23, 2015

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.H. L. Mencken

To those who view the government as a mostly benevolent, even lovable organization, establishing a national security apparatus to spy on Canadians is no big deal. The state, having access to our private communications through electronic eavesdropping, will lead to greater security. The menace of terrorism must be stamped out! And what better means of detecting and defeating evil doers than through the omniscient eye of a powerful intelligence agency? But to those of us who take a more critical view of the state and it's relationship with society and the individual the development of an Orwellian surveillance state seems like a very dangerous trend.

The state, in the Rothbardian view, is not simply an alternative and equally valid means or organizing society as the market but rather an institution of plunder and exploitation. It is a means by which some may rule over others. It is an instrument of compulsion, coercion and control. One of the most terrifying things about the Soviet Union was the NKVD, secret police who would arrive in the dead of night and whisk you away to a gulag for a tenner for even the most innocuous of activities (like belonging to a socialist but non bolshevick political party or praying in your home). Under this totalitarian regime there was no privacy and individuals had no rights. There existed only the right of the state, the right of the powerful to smash the weak. Of course Canada, with it's tradition of individual rights, is very far from a totalitarian society but the erosion of privacy which we have seen in the name of combating the scourge of drugs and now the menace of terrorism is moving us, however half heartedly, in this direction. Instead of waiting until it is too late, why not oppose this trend while it is still in it's infancy?

It's important to contrast both the danger of terrorism with the threat to the destruction of privacy. Exactly how much threat to jihadists really pose to Canadians? And how does this compare to the potential abuses attendant with expanding the national security state and it's surveillance arm? The proper means of dealing with criminal actions is the legal system. Is not in this case the cure worse than the disease? Don't we have a right to privacy? A right to live our lives without being constantly under the microscope of some government agent?

The threat of terrorism has been greatly exaggerated as a means of rationalizing an ever more intrusive role for the state in our lives. The far greater concern is the rise of the national surveillance state and the death of our privacy.

Friday, October 2, 2015

Recently Canadian Green Party leader Elizabeth May echoed American Presidential candidate Bernie Sanders in calling for an end to tuition. The NDP have taken the more "moderate" position of interest free student loans. They are not alone, Brazil, Sri Lanka, France, Malta, Germany and Scotland also offer a university education gratis. Not surprisingly this scheme is supported heavily by both students and faculty but there are some reasons to be skeptical about it.

The Canadian federal government already owes their creditors six hundred billion dollars; how precisely will this bonanza be financed? Would May sabotage our economy by raising taxes ? Would she cause inflation by printing the money? There is no such thing as a free lunch. And why should the cost of an education fall on anyone aside from the student who receives it? What our country needs is an aggressive program of tax and spending cuts not massive new entitlement programs.

There are already too many people going to university. Why shouldn't a prospective student have to rationalize their educational plan with a financial institution while applying for a loan? Or, heaven forbid, actually work their way through college. The cheaper something is the more of it will be purchased. Dropping tuition charges to 0 (or some nominal fee for books) will mean that more people leave the work force and enroll in university. More students will also mean more faculty members as well as support staff, and all of this will exacerbate the burden on the remaining taxpayers. If this program is extended to foreign students then this problem becomes even greater.

There is a finite pool of loanable funds. When the state guarantees student loans, and makes them accessible to virtually anyone, this lowers the supply of capital available for other financial activities and thus increases the cost of borrowing. Scarce resources are redirected away from where they would have the greatest benefit to consumers towards unnecessary post secondary education. Scarcity exists. It is crucial to consider both the initial impacts of a policy as well as the other unintended consequences, or as Bastiat put it, the seen and the unseen.

Nor are universities entirely benign; much of what is taught, in particular concerning the social sciences, is simply not true. When professors teach that capitalism is evil or that government intervention in the economy is critical to our long term prosperity they are not only incorrect but they are actively making things much worse. Ideas both good and bad are extremely powerful. Our beliefs and philosophies shape the future. If every sociology professor resigned tomorrow and began flipping burgers the world would be a much better place.

In the days of old, the the task of rationalizing the state's rule was delegated to the clergy. Priests would convince the people that the King was anointed by God and must be obeyed; in exchange they enjoyed their share of the royal plunder. In Oriental Despotism the King actually was God. Of course today we live in an enlightened society and so secular intellectuals have supplanted this role, and like the church of yesteryear they too justify the rule of the state and they too share in the take. They not only have a pecuniary interest in etatist policies, the continuation of the socialist / interventionist regime is critical to their well being as there is little demand for their "talents" on the free market.

Rather than gifting free tuition to all, it would be much better to stop subsidizing education all together. A lot of post secondary education is vital but there will always be a demand for vocational or professional training absent the massive program of subsidization which exists today. By eliminating the subsidies to universities and colleges which exist today the taxpayer will no longer be soaked to pay for utterly unnecessary programs and courses and can be allowed to keep a little more of their hard earned money.